More...

It is bureaucratic, complex and even
more mind-boggling than some of the changes Gordon Brown made when he
reigned supreme at the Treasury and turned the country’s benefits system
into one navigable only by rocket scientists.

As a result of George Osborne’s rash
scheme, about half a million more families will be dragged into the mire
of self-assessment, while hundreds of staff at Revenue & Customs –
an organisation notorious for its poor customer service – will be
diverted from other duties to try to administer the new tax.

It is intrusive, with the need to try
to tie higher earners with the parent who actually receives the
benefit. Revenue snoopers will have to pry into the living arrangements
of couples to ensure that all pay what the law demands and deal with the
challenges of relationship break-ups, divorce and separation.

Above all, though, the tax fails the
most basic fairness test. As has been consistently pointed out in
Financial Mail, couples with two incomes can jointly earn up to £100,000
and still reap the benefit in full.

But those who rely on a single
earner, perhaps because one parent is looking after very young children
at home, will start to lose the benefit once the household income passes
£50,000. This is unfair both to the parents but also to the children.

If the Government thinks £50,000 per
household is the right level to stop paying the benefit, then this
should apply to one and all. But figures issued last week by economic
forecaster Capital Economics indicate that the loss of the benefit for a
family of three children is equivalent to an annual pay cut of £4,000 –
a cut too far, surely, for a household living on one parent’s income of
£50,000 and already struggling against a horrible mix of rising energy
bills, untamed inflation and a fragile labour market.

Some professionals have called for a
delay in implementing the new tax. The Institute of Chartered
Accountants in England and Wales wants to see it put back from January
2013 to April 2013.

This would give families more time to
assess their options and shunt the change into the 2013-14 tax year,
meaning that at least an estimated 500,000 taxpayers would have one
fewer annual tax return to submit.

But the Chancellor must go further.
He should swallow his pride and rip up this lashed-up, hashed-up mess of
a policy and start afresh.

Osborne will make his Autumn Statement on December 5. Does he have the courage to do the right thing? I hope so.

NATIONAL Savings & Investments is
slowly making itself redundant as a provider of attractive savings
products, albeit with copper-bottomed safety guarantees.

Following the withdrawal of its
popular index-linked and fixed-rate savings certificates last September,
it has now made its attractive Direct Isa seriously ugly by trimming
the rate by 0.25 of a percentage point for all savers, new and old.

It means that the easy-access account will pay 2.25 per cent interest instead of 2.5 per cent.

National Savings & Investments
says the rate cut has been made to ‘balance the interests of its savers,
taxpayers and supporting stability in the wider financial services
sector’. That should count for nothing as far as Direct Isa savers are
concerned.

They would be wise to consider
alternatives provided they ensure any money they transfer falls within
the £85,000 safety net offered by the Financial Services Compensation
Scheme.

According to the money gurus at
savingschampion.co.uk, there are ‘plenty’ of better cash Isa rates
available from the likes of Marks & Spencer (2.75 per cent from
December 11) and Lloyds Banking Group brand BM Savings (2.75 per cent).
These cash Isas are all ‘easy access’ and accept transfers.